Home > News Release: Gross Domestic Product (GDP)
EMBARGOED UNTIL RELEASE AT 8:30 A.M. EST, THURSDAY, DECEMBER 22, 2011
BEA 11-63


* See the navigation bar at the right side of the news release text for links to data tables,
contact personnel and their telephone numbers, and supplementary materials.


Lisa S. Mataloni: (202) 606-5304 (GDP) gdpniwd@bea.gov
Andrew Hodge: (202) 606-5564 (Profits) cpniwd@bea.gov
Recorded message: (202) 606-5306    
Ralph Stewart: (202) 606-2649 (News Media)  
Jeannine Aversa: (202) 606-2649 (News Media)  
National Income and Product Accounts
Gross Domestic Product, 3rd quarter 2011 (third estimate)
Corporate Profits, 3rd quarter 2011 (revised estimate)
Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 1.8 percent in the third quarter of 2011 (that
is, from the second quarter to the third quarter), according to the "third" estimate released by the Bureau
of Economic Analysis.  In the second quarter, real GDP increased 1.3 percent.

      The GDP estimate released today is based on more complete source data than were available for
the "second" estimate issued last month.  In the second estimate, the increase in real GDP was 2.0
percent (see "Revisions" on page 3).

      The increase in real GDP in the third quarter primarily reflected positive contributions from
nonresidential fixed investment, personal consumption expenditures (PCE), exports, and federal
government spending that were partly offset by negative contributions from private inventory
investment and state and local government spending.  Imports, which are a subtraction in the calculation
of GDP, increased.

      The acceleration in real GDP in the third quarter primarily reflected accelerations in PCE, in
nonresidential fixed investment, and in exports, and a smaller decrease in state and local government
spending that were partly offset by a larger decrease in private inventory investment.

      Final sales of computers added 0.22 percentage point to the third-quarter change in real GDP
after adding 0.07 percentage point to the second-quarter change.  Motor vehicle output added 0.12
percentage point to the third-quarter change in real GDP after subtracting 0.10 percentage point from the
second-quarter change.

____________
FOOTNOTE.--Quarterly estimates are expressed at seasonally adjusted annual
rates, unless otherwise specified.  Quarter-to-quarter dollar changes are
differences between these published estimates.  Percent changes are calculated
from unrounded data and are annualized.  "Real" estimates are in chained
(2005) dollars.  Price indexes are chain-type measures.

      This news release is available on BEAs Web site along with the Technical Note and Highlights related to this release.  
For information on revisions, see "Revisions to GDP, GDI, and Their Major Components." ____________ The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 2.0 percent in the third quarter, 0.1 percentage point more than the second estimate; this index increased 3.3 percent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 1.8 percent in the third quarter, compared with an increase of 2.7 percent in the second. Real personal consumption expenditures increased 1.7 percent in the third quarter, compared with an increase of 0.7 percent in the second. Durable goods increased 5.7 percent, in contrast to a decrease of 5.3 percent. Nondurable goods decreased 0.5 percent, in contrast to an increase of 0.2 percent. Services increased 1.9 percent, the same increase as in the second. Real nonresidential fixed investment increased 15.7 percent, compared with an increase of 10.3 percent. Nonresidential structures increased 14.4 percent, compared with an increase of 22.6 percent. Equipment and software increased 16.2 percent, compared with an increase of 6.2 percent. Real residential fixed investment increased 1.3 percent, compared with an increase of 4.2 percent. Real exports of goods and services increased 4.7 percent in the third quarter, compared with an increase of 3.6 percent in the second. Real imports of goods and services increased 1.2 percent, compared with an increase of 1.4 percent. Real federal government consumption expenditures and gross investment increased 2.1 percent in the third quarter, compared with an increase of 1.9 percent in the second. National defense increased 5.0 percent, compared with an increase of 7.0 percent. Nondefense decreased 3.8 percent, compared with a decrease of 7.6 percent. Real state and local government consumption expenditures and gross investment decreased 1.6 percent, compared with a decrease of 2.8 percent. The change in real private inventories subtracted 1.35 percentage points from the third-quarter change in real GDP, after subtracting 0.28 percentage point from the second-quarter change. Private businesses decreased inventories $2.0 billion in the third quarter, following increases of $39.1 billion in the second quarter and $49.1 billion in the first. Real final sales of domestic product -- GDP less change in private inventories -- increased 3.2 percent in the third quarter, compared with an increase of 1.6 percent in the second. Gross domestic purchases Real gross domestic purchases -- purchases by U.S. residents of goods and services wherever produced -- increased 1.3 percent in the third quarter, compared with an increase of 1.0 percent in the second. Gross national product Real gross national product -- the goods and services produced by the labor and property supplied by U.S. residents -- increased 1.9 percent in the third quarter, compared with an increase of 2.2 percent in the second. GNP includes, and GDP excludes, net receipts of income from the rest of the world, which increased $3.9 billion in the third quarter after increasing $28.0 billion in the second; in the third quarter, receipts decreased $13.3 billion, and payments decreased $17.2 billion. Current-dollar GDP Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 4.4 percent, or $163.3 billion, in the third quarter to a level of $15,176.1 billion. In the second quarter, current-dollar GDP increased 4.0 percent, or $145.0 billion. Gross domestic income Real gross domestic income (GDI), which measures the output of the economy as the costs incurred and the incomes earned in the production of GDP, increased 0.2 percent in the third quarter, the same increase as in the second. For a given quarter, the estimates of GDP and GDI may differ for a variety of reasons, including the incorporation of largely independent source data. However, over longer time spans, the estimates of GDP and GDI tend to follow similar patterns of change. Revisions The third estimate of the third-quarter increase in real GDP is 0.2 percentage point, or $6.2 billion, lower than the second estimate issued last month, primarily reflecting a downward revision to personal consumption expenditures that was partly offset by an upward revision to private inventory investment. Advance Estimate Second Estimate Third Estimate (Percent change from preceding quarter) Real GDP............................... 2.5 2.0 1.8 Current-dollar GDP..................... 5.0 4.6 4.4 Gross domestic purchases price index... 2.0 1.9 2.0 Corporate Profits Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $32.5 billion in the third quarter, compared with an increase of $61.2 billion in the second quarter. Current-production cash flow (net cash flow with inventory valuation adjustment) -- the internal funds available to corporations for investment -- increased $35.8 billion in the third quarter, compared with an increase of $86.2 billion in the second. Taxes on corporate income decreased $9.1 billion in the third quarter, compared with a decrease of $1.8 billion in the second. Profits after tax with inventory valuation and capital consumption adjustments increased $41.6 billion in the third quarter, compared with an increase of $63.0 billion in the second. Dividends increased $14.0 billion, compared with an increase of $13.6 billion; current- production undistributed profits increased $27.7 billion, compared with an increase of $49.3 billion. Domestic profits of financial corporations increased $9.2 billion in the third quarter, in contrast to a decrease of $54.2 billion in the second. Domestic profits of nonfinancial corporations increased $17.9 billion in the third quarter, compared with an increase of $80.8 billion in the second. In the third quarter, real gross value added of nonfinancial corporations decreased, and profits per unit of real value added increased. The increase in unit profits reflected an increase in unit prices that was partly offset by increases in both the unit labor and unit nonlabor costs corporations incurred. The rest-of-the-world component of profits increased $5.4 billion in the third quarter, compared with an increase of $34.6 billion in the second. This measure is calculated as (1) receipts by U.S. residents of earnings from their foreign affiliates plus dividends received by U.S. residents from unaffiliated foreign corporations minus (2) payments by U.S. affiliates of earnings to their foreign parents plus dividends paid by U.S. corporations to unaffiliated foreign residents. The third-quarter increase was accounted for by a larger decrease in payments than in receipts. Profits before tax with inventory valuation adjustment is the best available measure of industry profits because estimates of the capital consumption adjustment by industry do not exist. This measure reflects depreciation-accounting practices used for federal income tax returns. According to this measure, domestic profits of both financial and nonfinancial corporations increased. The increase in nonfinancial corporations reflected increases in manufacturing, in other nonfinancial industries, and in transportation and warehousing that were partly offset by decreases in information, in wholesale trade, and in utilities. Within manufacturing, the largest increase was in other durable goods. Profits before tax increased $22.3 billion in the third quarter, compared with an increase of $13.5 billion in the second. The before-tax measure of profits does not reflect, as does profits from current production, the capital consumption and inventory valuation adjustments. These adjustments convert depreciation of fixed assets and inventory withdrawals reported on a tax-return, historical-cost basis to the current-cost measures used in the national income and product accounts. The capital consumption adjustment decreased $4.6 billion in the third quarter (from $107.3 billion to $102.7 billion), compared with a decrease of $8.1 billion in the second. The inventory valuation adjustment increased $14.9 billion (from -$60.4 billion to -$45.5 billion), compared with an increase of $55.6 billion. Effective with this release, chained-dollar gross value added of nonfinancial corporate business was revised beginning with 1929. Chained-dollar gross value added is derived by deflating current- dollar gross value added by a revised chain-type price index for nonfinancial industries from the annual revision of BEAs industry accounts that was released this month. * * * BEAs national, international, regional, and industry estimates; the Survey of Current Business; and BEA news releases are available without charge on BEAs Web site at www.bea.gov. By visiting the site, you can also subscribe to receive free e-mail summaries of BEA releases and announcements. * * * Next release -- January 27, 2012, at 8:30 A.M. EST for: Gross Domestic Product: Fourth Quarter and Annual 2011 (Advance Estimate) * * * Release dates in 2012 Gross Domestic Product 11: IV and 2011 annual 2012: I 2012: II 2012: III Advance... January 27 April 27 July 27 October 26 Second.... February 29 May 31 August 29 November 29 Third..... March 29 June 28 September 27 December 20 Corporate Profits Preliminary... ... May 31 August 29 November 29 Revised....... March 29 June 28 September 27 December 20